Industry Updates 14th August,2012

India ministry of coal allocates 195 coal blocks

Mr Pratik Prakashbapu Patil minister of state in the ministry of coal informed that government has allocated a total of 195 coal blocks stand allocated to various public and private sector companies. Out of the allocated coal blocks, 30 coal blocks have started production.

The remaining coal blocks which have not started production so far, are in various stages of obtaining statutory clearances and mining lease, preparing mining plan, acquisition of land, procuring machinery and equipment etc for both mining as well as end-use project.

The Minister further stated that the development of coal blocks involves a gestation period of 3 to 5 years for reaching the production stage and another two to three years for reaching the optimal production capacity. As per the guidelines, coal production from captive coal block should commence within 36 months (42 months in case the area falls in forest land) in case of open cast mines and in 48 months (54 months in case the area falls in forest land) in case of under ground mine, from the date of allocation. If the coal block is not explored, additional two years are allowed for detailed exploration and three months for preparation of geological report.

Mr Patil said that the responsibility of developing the coal block as per the prescribed guidelines and milestone chart attached with the allocation letter rests entirely with the allocatee company. In the terms and conditions of the allocation letters, it is categorically mentioned that in the event of willful delay in the development of coal blocks and in setting up of the end use project, the Government will take appropriate action to de-allocate the said block.

Further, the allocatees have to submit Bank Guarantee which remains valid at all the times till the production from the coal block reaches its peak rated capacity. The Coal Controller's office monitors on regular basis the achievement of different milestones. Government periodically monitors and reviews the development of allocated blocks as well as end use plants by the allocatee companies in the Review Meetings. As on date, based on the recommendations of review committee meetings held, the Government has de-allocated 25 coal blocks. Further, an Inter-Ministerial Group (IMG) under the Chairmanship of Additional Secretary (Coal) with representatives from the Ministries of Power, Steel, Law & Justice and Departments of Economic Affairs and Industrial Policy and Promotion has been constituted on 21.06.2012 which inter-alia would undertake periodic review and monitor the progress of allocated coal/lignite blocks and make recommendations on action to be taken including de-allocation, if required.
(Steel Guru)
Sail approaches government for more coal blocks
In an effort to get at least 25-30 per cent coking coal from indigenous sources, Steel major SAIL has approached the government seeking allotment of more coal blocks. "We want to source at least 25 to 30 per cent coking coal from indigenous sources. Our target is to get 7/8 million tonne coking coal from indigenous sources," SAIL Director (raw materials & logistics) A K Pandey told PTI here.

At present, out of its total requirement of 14 mt, the company has managed to source about 3.5 mt of coking coal mainly from Coal India Ltd besides its own mines. Pandey said, at present, the company has to spend a whopping Rs 12,000 crore for importing around 11 mt coking coal.

SAIL's requirement of coking coal would go up to 21 mt when its capacity would increase to around 24 mt from the existing 14 mt by next year.

Higher input cost was one of the reasons which has affected the company's bottom-line as SAIL reported 18 per cent dip in net profit at Rs 696 crore for the first quarter ended June, 2012.

Stating that SAIL had got two coal blocks at Jharia coal belt in Jharkhand, Pandey said the company has approached the government for some more coal blocks in Jharia.

"Being a PSU, we have requested the government to allot us a few more coal blocks through government disposition route and we are expecting it," he said.
Govt not to reconstitute GOM on opening up of coal sector
The government has decided not to reconstitute the Group of Ministers (GoM) which was formed to evolve a consensus on opening up of coal sector for commercial mining.